(Reuters) -Bank of America Corp reported a better-than-expected fourth-quarter profit on Friday as rate hikes helped it charge more interest on loans to customers.
The U.S. Federal Reserve and other major central banks raised rates aggressively last year to tame decades-high inflation.
The ‘higher-for-longer’ rate environment has underpinned profits at consumer banks, with analysts expecting those gains to peak in 2023. This helped partially offset sluggish dealmaking and larger provisions for loan losses.
Bank of America’s revenue, net of interest expense, increased 11% to $24.5 billion in the fourth quarter.
The bank earned 85 cents per share in the quarter. Analysts, on average, had estimated a profit of 77 cents per share, according to Refinitiv IBES data.
Profit applicable to common shareholders rose 2% to $6.9 billion in the quarter, from $6.77 billion a year earlier, the bank said in a statement.
(Reporting by Manya Saini in Bengaluru and Lananh Nguyen in New York; Editing by Savio Dsouza)
